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Business

EU Deadline for Microsoft Expires

The European Union on Wednesday began studying proposals from Microsoft to end an antitrust row that has seen the US software giant threatened with heavy fines.

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An EU deadline passed on June 1

"The contacts continued late yesterday evening and now we're examining what they've put on the table," Jonathon Todd, spokesman for European competition commissioner Neelie Kroes, told the AFP news agency. "The commission will now carefully analyze what has been put on the table and decide whether or not we consider that Microsoft has complied with the March 2004 decision."

In March 2004, the commission, which polices anti-trust issues in the EU, fined the software group a record 497 million euros ($623 million) for abusing its dominant market position.

"I can confirm that we had intense contacts with Microsoft until late last night," Todd said. "That analysis is probably going to take a few weeks."

Facing $5 million per day fine

Windows xp

The operating system can't work without media player, company officials say

Microsoft is facing a daily fine corresponding to five percent of its world sales, or $5 million per day, if it does not comply. "The proposals went into the commission yesterday," before midnight, a spokesman for Microsoft in Brussels said. "Now, we will await their response."

Previous attempts to implement the ruling, which found the company guilty of abuse of its dominant position, have fallen foul of the regulators.

If the proposals are not acceptable, the commission will notify the company of its intention to impose the fine, give Microsoft an opportunity to respond, then consult member states, national competition authorities and an advisory committee made up of other units of the commission.

Its demands include that Microsoft market a version of its leading operating system Windows without bundling it to its software Media Player and divulge information about its product operating system needed by its competitors.

Officially, Microsoft has developed a version of Windows without Media Player but it believes the product will not work well, and in any event its move might not be enough to satisfy Brussels.

Mario Monti Microsoft EU

In March 2004, former European Commissioner for Competition Mario Monti announced that the EU found Mícrosoft guilty of violating anti-trust laws

The commission has also called for an independent "monitoring trustee" to be named to make sure that Microsoft applies the ruling correctly.

Despite "regular contacts" between Brussels and the company, Microsoft has left the commission unsatisfied on all of its demands, and the fine hanging over it has not removed doubt in legal circles about whether it will comply.

The fine, though huge, is a drop in the ocean for the group's profits.

Microsoft appealing

Frustrated with Microsoft's defiance in complying with the decision, EU competition commissioner Neelie Kroes decided last week to press it by giving it "until the end of the month" to put something workable on the table.

The company has lodged an appeal against the decision with the European Court of Justice, the EU's top court. It also tried to suspend the implementation of the decision in the meantime but the court refused.

Some legal experts expect the most likely scenario to be for Microsoft to pay fines while it awaits the appeal in the hope that it will be successful.

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